Kentucky FHA Loan Louisville Kentucky Mortgage Guidelines

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Here are tips for improving your credit score

Pay your bills on time. Late payments can hurt your score significantly. If you have missed payments, get current and stay current. The more you pay your bills on time, the better your score.
Open a secured credit card ( 2 of them) for the both of you.

Keep credit card balances low relative to credit limits (30 percent or lower is recommended). “Maxing out” your credit cards means you have a very high utilization rate, which significantly lowers your credit score.

Here are NerdWallet’s picks for the best secured credit cards.

Lowest deposit for people with no credit: Capital One® Secured MasterCard®
For a deposit of $49, $99 or $200, depending on your credit history, you’ll get a limit of $200;
the annual fee is $0.

Capital One Secured MasterCard Credit Card
(86)
Apply Now
on Capital One’s
secure website

Benefits of the Capital One® Secured MasterCard®:

Unlike most secured cards, it’s possible to get a credit limit on this card that’s higher than the security deposit you put down. You can get a limit of $200 for a $49, $99 or $200 deposit.
You can make partial payments on your deposit, as long as you provide the full amount within 80 days of being approved. You’ll get access to your full credit line before that time.
There’s no penalty APR.
This card reports to the three major consumer credit bureaus, which is somewhat rare among secured cards.
You can track your credit-building with Capital One’s Credit Tracker.

Best for bad credit or no checking account: OpenSky® Secured Visa® Credit Card

Capital Bank Open Sky Secured Credit Card
(3)
Apply Now
on Capital Bank’s
secure website

Benefits of the OpenSky® Secured Visa® Credit Card:

You can qualify for this card within minutes. The bank doesn’t run a credit check and doesn’t require a checking account, unlike other major issuers.
Since the annual fee is $35, this card is a relatively affordable way to improve a severely damaged credit score.
The card reports to the three major consumer credit bureaus.

Credit Score

While the items on your credit report matter, you’ll also need to watch your FICO score. There are many different types of credit scores out there. You have the individual credit bureaus scores (Experian, Trans Union, and Equifax), FICO scores, Vantage Scores, and industry specific scores. However when looking to purchase a home you will want to watch your FICO as it is used in an overwhelming majority of mortgage related credit evaluations.

Also it’s important to note that FICO changes the way they evaluate creditworthiness based on new information and changes in the market. They have recently release FICO version 9. Since the majority of mortgage lenders still use an older FICO scoring model, when evaluating and monitoring your score, FICO recommends you use one calculated from a scoring model previous to Version 8.

When evaluating your FICO score it’s good to know that a score above 700 is considered excellent while a score under 620 is considered poor. You may secure a mortgage with a low FICO score but your interest rates will be subprime. In the case of a mortgage, it may be beneficial to wait until you’ve raised your credit score.

FICO has a great calculator on their web site to help you plan on when is a good time to get a mortgage loan depending on your credit score. It will help you determine if the savings you will receive with a higher score are worth the wait and energy required to increase your credit score.

Here are six tips for improving your credit score for a fresh financial start in 2017.

1. Pay Your Monthly Bills on Time
Paying monthly bills is a necessary chore that has a definite effect on your credit score. According to the FICO scoring model, your payments account for as much as 35 percent of your total score. Create reminders for due dates or establish a calendar for yourself to ensure you get everything paid on time.

2. Reduce Your Debts
Got credit card debt? Start paying it off now. Part of your credit score is based on the amount of available credit you have, known as your credit utilization ratio. So if you’re carrying high balances, you’ll want to lower them as soon as possible. Create a personal budget with a goal of reducing your spending so that it’s lower than your income. Then, use any monthly surplus for your credit card debts until they’re gone for good.

3. Limit Credit Inquiries
Looking for a new apartment? What about a mortgage? In either situation, try and group your applications together as much as possible. Applications for new lines of credit will generate a “hard pull” on your credit, and having too many of them in a short period of time can lower your score. However, credit reporting agencies usually consider a group of applications within a short period of time as one pull, as long as they’re in the same category.

Similarly, limit yourself to opening up no more than one or two credit cards per year, which also generate hard pulls. Even if you get a ton of offers in the mail for stellar sign-up bonuses, they’re likely to be offset by the damage to your credit. FICO reports that new credit and credit inquiries account for 10 percent of your total score.

4. Don’t Cancel Old Cards
Have a card you don’t use anymore? Don’t close it. This can negatively affect your score as it lowers your amount of available credit. Instead, use it about once per month and don’t forget to pay the bills in full, and on time.

5. Request Credit Limit Increase
If you only have one card and you’re constantly approaching your spending limit, call the bank and ask for an increase in your credit line. This will raise the amount of available credit, which will eventually improve your score.

6. Take Care of Late Payments Before They Hit Your Score
If you do happen to miss a payment, contact the card issuer immediately. If you have good history built up, the company may agree to not report your late payment. Even if you can’t avoid a late-payment fee, be sure to get your account up to date as soon as possible so you can limit the damage.
Your credit score is yours to own. It reflects your financial history and helps lenders predict how you will manage your finances in the future. Due to the lingering effects of credit, you don’t want to waste any time to improve your credit.

Joel Lobb
Senior Loan Officer
(NMLS#57916)

American Mortgage Solutions, Inc.
10602 Timberwood Circle, Suite 3
Louisville, KY 40223

phone: (502) 905-3708
Fax: (502) 327-9119
kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

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We discuss various things such as credit, income, assets, family, and future plans. During these discussions, I have discovered that not only must I tell the borrowers what to do, I need to place a lot of emphasis on what not to do.

1) Do not apply for credit cards while waiting to be approved for a mortgage. Most lenders will “monitor” your credit profile during the process or recheck your credit report before closing. More available credit can mean a lower credit score and a higher DTI (debt to income ratio used to determine if you qualify to buy – money coming in verses money going out). This can also delay a closing because the future homeowner may have to provide a statement from the account to the underwriter.

2) Do not be late on any payment. If you are late on a payment prior to closing, your score will drop. I saw one this morning drop from 679 to 582. Crazy! An underwriter will not approve your home loan if you cannot show the ability to pay a bill on time.

3) Do not quit your job. If anything changes regarding your employment, tell your loan officer. One of the last things a lender does prior to closing is verify employment. No job. No loan. This has actually happened.

4) Do not accept cash gifts and deposit them into your bank account. Cash gifts are very difficult,if not impossible to prove. If you are receiving a gift in order to make the down payment at closing, talk to your loan officer first. He or she can make your life a lot easier with just a little guidance and direction.

I know that the four items above may seem simple, but what if the buyer does not know and goes down that path? It is painful to have worked so hard to buy the home of your dreams only to have it taken away due to one bad decision. I work for one of the best mortgage companies in the country and I help people get a home loan every day. But it is also my job to inform inform inform.